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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

​​EUR/USD stabilizes while GBP/USD, AUD/USD come off their three-month highs

Outlook on EUR/USD, GBP/USD and AUD/USD as the US dollar gains ground on flight-to-safety flows amid escalation in the Middle East.

GBP Source: Bloomberg

​​​EUR/USD stabilizes above 200-day simple moving average

EUR/USD's reversal off Wednesday’s four-month high at $1.1017 on softer eurozone inflation which brought forward European Central Bank (ECB) rate cut expectations for next year and led to a sharp drop in bond yields so far seems to be levelling out above the 200-day simple moving average (SMA) at $1.0822.

If it were to be slipped through, a top would be confirmed and the mid-September and early November highs at $1.0769 to $1.0756 be eyed.

​Minor resistance above Monday’s intraday high at $1.0886 can be spotted at Friday’s $1.0912 high. Further up the breached October-to-November uptrend line, now a resistance line, can be found at $1.0943, together with the $1.0945 late August high. Still further up sits the 21 November high at $1.0965.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​GBP/USD remains below its near three-month high

​Last week GBP/USD made a near three-month high at $1.2733 before losing upside momentum and slipping back to its steep November uptrend line which so far offered support and on Monday comes in at $1.264.

​Only a fall through the next lower Thursday low at $1.2604 would put the late June low at $1.2591 on the cards, below which lies the late August low at $1.2549.

​Resistance above last week’s high at $1.2733 sits at the late August peak at $1.2746.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​AUD/USD comes off its 3 ½ month high

AUD/USD's advance to new 3 ½ month highs at $0.6688 has been followed by a slip back towards its November-to-December uptrend line at $0.6608 as Australia’s monthly inflation gauge rises in November and turns positive for the first time in three months.

​While the November-to-December accelerated uptrend line, the 200 SMA and Thursday’s low at $0.6608 to $0.6571 offer support, the recent uptrend remains valid. While the next lower August, September and early November highs at $0.6523 to $0.6511 hold, the current medium-term uptrend will stay intact as well.

A rise above $0.6688 would target the early July high at $0.6705.

AUD/USD chart Source: IT-Finance.com
AUD/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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